Yahoo Finance Bitcoin rally driven by believers collecting evermore tokens
Bitcoin's price has seen a notable increase in the past week. The rise has been driven in some part by a dynamic between short and long-term bitcoin holders, according to an analyst.
Bitcoin (BTC-USD) has risen by 4.5% in the past week, now changing hands at $27,602, (£22,771) according to CoinGecko data.
This is a retrace from a height of $28,500, that was reached on Monday. The early October high marked a significant price point that has not been reached since August 17, 2023.
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"Bitcoin now finds itself in a technical range, confined between the resistance level of $28,500 and the support level of $27,100," CryptoQuant analyst Adam Mourad told Yahoo Finance UK.
Underlying market dynamics driving the bitcoin price
The analyst explained the underlying factors that could be at play. Mourad described a market dynamic that has developed between short and long-term bitcoin holders. He referred to on-chain metrics that demonstrated long-term holders acquiring the digital assets that are being sold by short-term holders.
"The supply held by short-term holders has dipped to its lowest point in nearly eight years, a level not seen since November 2015, with a value of 3.8 million bitcoins," the analyst said.
Conversely, the CryptoQuant analyst referred to on-chain data that showed the supply of bitcoin held by long-term holders has reached an all-time high, standing at 15.6 million bitcoins.
He added that long-term holders have a deeper belief in the asset and will hold and accumulate the asset. A dynamic that favours price appreciation.
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Former BlackRock executive updates forecast on spot bitcoin ETFs
Long-term holders of bitcoin wait in hopeful anticipation that an approval of a spot bitcoin ETF by US regulators is forthcoming. A spot bitcoin ETF is a financial product that investors hope will open the gateway for mainstream capital to flood the crypto market.
At a conference in London this week, former BlackRock (BLK) managing director Steven Schoenfield said he believed the SEC could approve a spot bitcoin ETF within 3-6 months based on mounting regulatory pressure. This relatively short timeframe marks a shift in Schoenfield’s outlook. He had previously projected a longer “nine to twelve months” window.
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During a panel discussion on ETFs at CCData’s Digital Asset Summit in London, Schoenfield explained his updated forecast is based on a view that there has been “a significant improvement in the dialogue” between the Securities and Exchange Commission (SEC) and financial industry figures. The SEC is the US financial regulator that will make the decision whether to approve the multiple spot bitcoin ETF filings that have been filed.
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